The governor said Kyl, a Republican, will serve through at least the current congressional term, though it's unclear if he'll serve through 2020, when there's expected to be a special election for the last two years of McCain's term.
"There is no one in Arizona more prepared to represent our state in the U.S. Senate than Jon Kyl. He understands how the Senate functions, and will make an immediate and positive impact benefiting all Arizonans," Ducey said.
Kyl previously served in the Senate from 1995 to 2013 alongside McCain, including five years as Senate Republican whip. He held a seat in the House from 1987 to 1995.
"We are all saddened by the circumstances that required this appointment and appreciate there was only one John McCain," Kyl said. "John and I served the people of Arizona for nearly two decades, and in that spirit, along with Senator [Jeff] Flake, I will do my best to ensure Arizonans are well represented in the Senate.
"There is much-unfinished business, including confirmation of President [Donald] Trump's nominees for judicial and executive branch positions, and I look forward to getting to work on behalf of my fellow Arizonans."
Cindy McCain, the late senator's widow, applauded Ducey's appointment of Kyl.
"Jon Kyl is a dear friend of mine and John's. It's a great tribute to John that he is prepared to go back into public service to help the state of Arizona," she wrote on Twitter.
Meghan McCain, John McCain's daughter, also supported the pick.
"I'm very grateful to Jon Kyl for his willingness to return to public service to take my father's seat in the Senate. I can think of no one better to keep fighting for the country and state he held so dear. He has always been a true statesman and a friend to my family," she wrote.